Page 40 - IMDR JOURNAL 2020-21

IMDR’s Journal of Management Development and Research 2020-21

2) Workers and employees: Opportunities picture if the entire process .
for retraining and redeployment of workers have 2) some restructuring of PSUs may be needed
not been developed at all. Although government before disinvestment to enhance the value of shares
has announced rehabilitation of workers, safety and increase sale proceeds
net will be provide nothing has been done except 3) The restructuring can be on the basisof:
compensation under VRS. Financial restructuring, technological restructuring
3) Proceeds of disinvestment :The proceeds of , corporate governance .
disinvestment go to consolidated fund of India from 4) Efficiency may also be achieved by changing
which it meets the budget deficit . It does not benefit the quality of management and not only by changing
the enterprise in terms of immediate accrual of the ownership
resources. The entire proceeds of disinvestment are 5) The stress should be on making PSUs
been used to mitigate the gap fiscal deficit instead work more efficiently rather than reducing public
of using them for development of social sector & ownership in economy.
building infrastructure.
4) Transparency in process of valuation: 2.2 Suggestions:
The Public accounts committee (PAC) and or the 1. The government has to design a policy
Controller and Auditor general (CAG) has criticized framework for the entire disinvestment process.
that shares are undervalued. there is no transparency 2. The government should de-link the
in the process of valuation. The task is done by expert disinvestment process from the budgetary
merchant banker but there is no expert government exercise.
agency to crosscheck the valuation done by the 3. Government should stop setting up of the
merchant banker , plus the land belonging to PSU’s targets in every year annual budget and should
are not considered in the process of valuation as have a long-term plan.
they do not earn income , this is clearly unjustified. 4. A separate fund should be created for
5) Strategic and non-strategic sector : strategic disinvestment and it should be kept under
sector has been narrowly defined in India. Critics the control of president and the fund should
argue that oil and power generation sector should be be utilized for building infrastructure and
recognized as strategic sectors. developing the social sector.
5. Timing of disinvestment is crucial and the
2.1 Conclusion government should follow a specific method or
Public Sector has played an important role process in order to reap more chunks.
in the industrial and economic development 6. The entire exercise of disinvestment should be
of india. Public Sector companies have provide audited by not less than two reputed auditing
defence armaments, are responsible for research firms in order to have a fair and transparent
& development of nuclear energy. And have been picture of the entire process.
instrumental in development of vital industries of 7. Finally, the government should have an ‘Yearly
the economy steel, aluminum, copper, information Action Plan’ which should spell out the
technology, telephone industries, heavy industries, activities carried out in that particular year and
automobiles, ship manufacture and shipping at the end of the year an ‘Action Taken Report’
transport, oil production & refining, petrochemicals, has to be submitted.
fertilizers, machine tools and several other items in
the economic development of India. Public Sector
has accelerated generation of financial resources for
the development of the State. .
With our research paper we come to the following
conclusion:

1) Disinvestment is a process and the entire
process of disinvestment should be audited by
reputed auditing firms, to have a fair and transparent

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